eBooks and their role on publishers, libraries, authors, readers

Government Technology recently ran a story about ebooks and libraries. I think it’s interesting for anyone who uses a library or writes or sells books but it’s also interesting for anyone who is in an industry where technology can or might be a disruptive technology. Some disruptive technologies – such as digital versus traditional cameras – are clear game changers. eBooks are a pretty clear game changer too – but the relationship between ebook and library is a little slower to develop. It’s also a story of what happens when business plans don’t keep up with technology.

The quick background – libraries have to pay a lot more for ebooks than traditional books. They have to deal with restrictive borrowing policies. The big publishers have been calling these shots. Big publishers have traditionally been quite fair to libraries but have seen the threat of borrowing ebooks on their ability to sell ebooks. Some won’t even sell them ebooks. Another quick fact – ebook readership has grown from 6 percent in 2010 to 18 percent in 2011 to 33 percent in 2012.

More info from the article…

Before the arrival of e-books, the library business model for purchasing and distributing print books was set in stone. There were intermediaries between the publishers and libraries, companies like the giant distributor Baker & Taylor, but there was little tension. Libraries purchased books at a comfortable discount, sometimes as much as 40 percent off the retail price, and publishers earned an acceptable profit by selling them new releases and replacements for worn-out books. A library bought a copy of a book, and it could lend the copy as many times as the binding would hold; if the book was in high demand, the library could buy more copies. Affordable prices meant a library could build a huge reservoir of material for its readers.

The digital market, however, has been built from scratch in the last few years, and all those old norms have disappeared. There are still intermediaries that transmit digital files from the publisher’s online collection to the libraries — one company, OverDrive, owns an 85 percent market share — but little else is the same. First of all, not every major publisher is selling its products to any library that wants them. Several, including Simon & Schuster, Macmillan and Penguin, either don’t sell e-books to libraries at all or have only begun to do so through pilot projects that work with select libraries, usually concentrated in New York. This leaves out the nearly 9,000 other libraries spread throughout the rest of the country.

Even if publishers do sell to libraries, they’ve restructured the rules. HarperCollins, for example, sets a limit of 26 loans on each e-copy; after that limit is reached, the library has to purchase a new copy license.

And info on the solution…

It was remarkable in its simplicity: LaRue decided to build a digital warehouse and contracting system, which would allow his libraries to purchase directly from smaller publishers and authors, cutting out the Big Six and OverDrive, which would mean lower prices. In January 2011, Douglas County Libraries purchased Adobe software that for $10,000 would serve as the backbone of the new system, safely transferring files from the provider to the library to the reader. LaRue wrote “Dear Publishing Partner” letters, setting simple yet firm expectations for how the content would be handled and eliminating the restrictions that accompanied the major publishers’ products. The whole enterprise cost $200,000, but LaRue says the libraries have already saved that much in a year because the prices they’re paying for the independent and self-published materials are much lower, up to 45 percent below retail.

The system went live in February 2012, and LaRue went to work finding partners. They soon flooded Douglas County’s digital shelves. The libraries have so far purchased e-books from more than 900 smaller publishers and hundreds of individual authors. They make up 21,000 of the 35,000 titles in his virtual catalog. The rest come from the major publishers, sold through intermediaries at much higher prices. Those mainstream titles are still more popular with readers, making up 65 percent of the county’s loans, but it’s clear that the appetite for the independent and self-published content is growing.

It seems like a terrific opportunity for the small publishers. In fact, this may be a road for authors to work directly with libraries…

Having lit this fuse, LaRue is turning his attention toward what he sees as the next frontier: libraries themselves as publishers. Now that Douglas County has the content management system for its direct-purchasing project, he thinks it would be easy to turn that into a self-publishing portal. The library would be the center of a local authors’ society, connecting self-starters to copy editors, cover artists and e-book distributors, and transforming thousands of Word documents sitting idly on neighborhood desktops into polished, professional products. LaRue hasn’t actually done this yet, but the idea is already attracting adherents. Officials at the Harris County Public Library say they’re interested in eventually starting a similar project.

A great example of innovation born of need. And it’s an innovation with a trickle effect. It will be interesting to see what the big publishers do. They can see what’s happened to the music industry, to Kodak cameras and Netflix. Will they be able to come up with their own innovation. I also think it’s a fun invitation for all of us to think about what we could do differently in our own industry. Are there needs to be filled? Are there opportunities worth taking? Broadband doesn’t just make things faster – it can be a game changer in the right hands!